Six Icelandic Firms on Yale’s List of Companies Doing Business in Russia, Three Shouldn’t Be

The Yale School of Management names six Icelandic businesses on its list of companies still doing business in Russia, but RÚV reports that three of them have no presence or operations in Russia at all, and one never did in the first place. Attempts have been made to contact the manager of the Yale list, a professor and dean at the university, to make appropriate corrections, but these attempts have not been successful.

Failing grades

The list, simply dubbed “Yale CELI List of Companies” (CELI stands for Chief Executive Leadership Institute”) was started on February 28, days after Russia’s invasion of Ukraine. Since then, the responses of over 1,200 companies regarding their presence and business activities in Russia have been tracked by Professor Jeffrey Sonnenfeld and the Yale Research Team. “Originally a simple ‘withdraw’ vs. ‘remain’ list,” reads the preface, “our list of companies now consists of five categories—graded on a school-style letter grade scale of A-F for the completeness of withdrawal.”

The CELI list is said to be “updated continuously.” As of July 8, 2022, its headline read “Over 1,000 Companies Have Curtailed Operations in Russia—But Some Remain.” As of that time, six Icelandic companies were included on the list. Three of these—Hampiðjan, Knarr Maritime, and Sæplast—were given a grade of F, “Digging In: Defying Demands for Exit or Reduction of Activities.” Two other Icelandic companies—Marel and Naust Marine—were graded D, “Buying Time: Holding Off New Investments/Development” and one, Eimskip, was graded C, “Scaling Back: Reducing Current Operations.”

No operations in Russia, but still on the list

RÚV contacted the public relations officer for the shipping company Eimskip, who said the company had ceased sailing to Russia right after the invasion and moreover, had not had any operations in the country since 2019, when it closed its Russian office. The PR officer said that Eimskip has attempted to contact Prof. Sonnenfeld to correct its record without success.

According to the Yale list, Knarr Maritime, has “members still operating in Russia.” RÚV reports, however, that the company closed its office in Russia two years ago and no longer has any operations there.

Sæplast, a company that designs and manufactures insulated tubs and pallets for use in the fishing industry, issued a statement on its website on Thursday, saying that it has no operations in Russia, and never has. “The company has no office in Russia and no employee works there,” reads the statement. “Sæplast sold tubs to Russia for many years, either directly or through agents and/or independent distributors, but since Russia invaded Ukraine, no products have been sold there or delivered from Sæplast to the Russian market. Allegations about Sæplast’s operations and trade with Russia are therefore incorrect.”

According to Sæplast general manager Daði Valdimarsson, the company has attempted to convey this information to the managers of the Yale list but has had no success. Sæplast has also been in touch with the Embassy of Ukraine to Iceland (located in Finland) via the Iceland Chamber of Commerce.

Still have offices in Russia

Naust Marine is one of two Icelandic companies given a D grade, meaning that they’ve paused but not ceased operations in Russia. Four years ago, Naust Marine signed a major deal to sell electric winches to Russia for use on its trawlers. General Manager Bjarni Þór Gunnlaugsson told RÚV the deal is at a complete standstill, but it’s unclear what that means for future operations.

Fellow D recipient Marel, a food processing company, published a statement on its website on March 9, saying that it “strongly condemns the military actions of the Russian government in Ukraine” and that it had “taken the decision to pause all new projects in Russia.” The statement continued by saying that Marel has a sales and service operation in Russia, and employees 70 people. It will “continue to prioritize the safety and wellbeing of our employees” and “maintain our dedicated teams in the Ukraine and Russia and our office in Russia, despite expected lower utilization in the near future.” The statement also added that “Marel’s annual revenues and order book in Russia and Ukraine amount to approximately 4% of total.”

RÚV was unable to speak to management at fishing manufacturer Hampiðjan, as they were apparently all attending a meeting on Friday. The company has an office in Murmansk, Russia. At time of writing, there was no information on Hampiðjan’s website indicating whether the Murmansk office is still operational, or if the its business activities in Russia have changed at all since the invasion of Ukraine.

Aluminium Workers’ Contract Hinges on Price of Energy

ISAL aluminium smelter Straumsvík

Three hundred workers in Rio Tinto’s ISAL aluminium smelter could see their collective agreement nullified in June if the National Power Company and Rio Tinto do not reach an agreement about the cost of power supplied to the smelter, RÚV reports. The National Power Company’s CEO says it is “unreasonable” for the contract to hinge on that factor, but says the company will not let it impact their negotiations with Rio Tinto.

Rio Tinto says energy costs hamper competitiveness

The workers’ collective agreement, which was signed in March, is valid for two years. It contains a clause, however, that makes it invalid as of June 30 if an energy supply contract has not been renegotiated between Rio Tinto and the National Power Company. The ISAL smelter, located in Southwest Iceland, has been running at a loss for the past eight years, and its executives point to high energy costs as one of the reasons.

National Power Company CEO Hörður Arnarson says his company did not know about the contract clause until it was reported on yesterday by Morgunblaðið. “I find it a very unreasonable development, both in collective agreement negotiations and in negotiations of energy contracts, to connect two unrelated parties in this way,” Hörður stated. “The only reason I can see for doing this is that they believe it will put added pressure on the National Power Company, but it won’t have that effect.”

“These are difficult conditions. Markets are closing for them,” Hörður added. “We will look for ways to find a common solution but it’s completely unclear whether we will agree on one.”

Smelter may close for two years

Rio Tinto is considering suspending production at the ISAL plant for two years due to the downturn in the market caused by the coronavirus pandemic. The metal and mining company is also preparing a lawsuit against Iceland’s National Power Company intended to release Rio Tinto from a large part of the electricity purchase obligation to which it is subject.

The ISAL smelter is one of the largest employers in the town of Hafnarfjörður and according to its mayor, has a “synergistic effect on other companies in town.”

Rio Tinto Considers Suspending Production at Iceland Aluminium Smelter

ISAL aluminium smelter

Rio Tinto is considering suspending production at its Straumsvík smelter in Iceland for two years, Morgunblaðið reports. The company, which is one of the world’s largest metal and mining corporations, is considering various options to reduce its losses during the economic downturn due to the coronavirus pandemic. Rio Tinto executives have also complained that high power costs have contributed to the company’s losses and are preparing a lawsuit against Iceland’s National Power Company.

Rio Tinto’s ISAL aluminium smelter, located in Southwest Iceland, has been operating at a loss for eight years. Its losses in 2019 alone amounted to ISK 13 billion ($91 million/83.7 million). Rio Tinto Aluminium chief executive Alf Barrios stated earlier this year that the smelter’s performance “is currently unprofitable and cannot compete in the challenging market conditions due to its high power costs.”

Prepare to sue Iceland’s National Power Company

Morgunblaðið’s sources report that the metal corporation is preparing a lawsuit against Iceland’s National Power Company, which is intended to release Rio Tinto from a large part of the electricity purchase obligation to which it is subject. The lawsuit also addresses alleged “product fraud” on the part of the National Power Company, which Rio Tinto alleges has been selling the smelter energy produced by coal and nuclear power, while the company purchased the energy on the grounds that it was produced using hydropower.